Thanks everyone for the detailed explanations! This clears up so much confusion. I was definitely overthinking this - sounds like I just need to worry about regular income tax on my $14k in short-term gains, not FICA. Based on what you all said, I'm in the 22% tax bracket so I should probably set aside around $3k for federal taxes on those gains, plus whatever my state rate is. Way less stressful than thinking I'd owe an extra 15.3% on top of that! Really appreciate this community - you saved me from either overpaying or calling my accountant and paying $200 just to ask this one question.

Just want to add one more thing that might be helpful - even though short-term capital gains aren't subject to FICA taxes, they do count toward your adjusted gross income (AGI). This means they could potentially push you into a higher tax bracket or affect other tax benefits that have income limits. For example, if your gains push your AGI above certain thresholds, you might lose eligibility for things like IRA deduction limits, student loan interest deductions, or other credits. It's worth running the numbers to see how your total income picture looks, not just the tax on the gains themselves. Also, since you mentioned you're doing more day trading this year, keep really good records of all your transactions. The IRS has been cracking down on unreported trading activity, especially with all the new 1099 reporting requirements for crypto and stock transactions.

Didn't see this mentioned yet, but the most important factor is the business use percentage. Even if you get the ownership/lease structure figured out, your wife needs to keep a detailed mileage log showing business vs personal use. The IRS is super strict about this documentation. My recommendation is to use an app like MileIQ or Everlance to track all driving automatically. Without good records, you could lose the entire deduction in an audit regardless of whose name is on the title.

Great question! I went through something similar with my consulting business. The key thing to understand is that the IRS cares more about actual business use than whose name is on the title. Here's what I learned from my CPA: If your wife's LLC will be the primary user of the vehicle for business purposes, you have a couple of solid options: 1. **Transfer ownership to the LLC** - This is usually the cleanest approach. The LLC owns the asset and can claim depreciation/Section 179 deduction directly. You'd need to handle the title transfer through your state's DMV. 2. **Create a formal lease agreement** - If you keep it in your name, the LLC can lease it from you. This needs to be a legitimate business arrangement with market-rate payments, proper documentation, and you'd report the lease income. For a vehicle over 6,000 lbs used primarily for business, the LLC could potentially claim the full Section 179 deduction (up to $1,160,000 for 2024) or bonus depreciation, which gives you that big upfront tax benefit you're looking for. The critical part is documenting business use percentage with detailed mileage logs. The IRS will want to see contemporaneous records showing business vs. personal use. I'd strongly recommend using a mileage tracking app from day one. Also consider liability insurance - make sure your coverage is appropriate for business use regardless of which ownership structure you choose.

I'm a CPA and wanted to address the RSU question that came up. Yes, marriage status can affect RSU taxation, but probably not in the way you're thinking. The RSUs themselves are taxed as ordinary income when they vest regardless of filing status, but your overall tax situation changes because you're filing jointly. With RSUs, the main consideration is withholding. Your employer will withhold taxes at supplemental income rates (usually 22% federal) when they vest, but your actual tax rate depends on your total household income. If you're married filing jointly with a high-income spouse, you might end up owing additional taxes at filing time since the withholding assumes single status. Make sure to adjust your W-4 and potentially make estimated quarterly payments once you're married to account for the RSU income combined with your spouse's income. The marriage itself doesn't change how RSUs are taxed, but it changes your overall tax picture. Regarding the original post - the December courthouse marriage strategy is very common and typically works exactly as planned for couples in your income situation. I've prepared taxes for many couples who did this and the savings are consistently substantial when one spouse has high income and the other has zero income. Just make sure to plan ahead for next year's withholding adjustments!

This thread has been incredibly informative! As someone who works in financial planning, I see this situation regularly and want to emphasize a few key points that might help with your decision. The tax savings you're projecting are very realistic. When one partner earns $195K and the other has zero income, married filing jointly typically provides substantial benefits by effectively spreading that income across lower tax brackets. Your $16K estimate aligns with what I commonly see in similar situations. Beyond the immediate tax benefits, consider these additional financial advantages: your girlfriend could contribute to a spousal IRA even without earned income (up to $7,000 for 2025), and adding her to your employer health insurance could provide immediate monthly savings if she's currently on an expensive individual plan. However, I'd strongly recommend running your specific numbers through a comprehensive tax projection before making the decision. Consider consulting with a CPA who can model both your 2025 savings and help you plan for 2026 when your girlfriend starts working. They can also advise on optimal W-4 adjustments to avoid overpaying taxes next year. From a relationship perspective, the key seems to be framing the legal marriage as purely administrative while preserving the emotional significance for your actual wedding ceremony. Many couples successfully maintain this separation and report that it doesn't diminish their wedding day at all. Given your long-term relationship and the substantial financial benefit, this appears to be a sound financial strategy that could significantly boost your wedding budget or other savings goals!

I keep hearing everyone talk about ROC, but my ET K-1 last year had like 6 different categories of income! Part was ordinary business income, part was ROC, part was interest, and there were some others. Do I need to track all of these separately??

Great question! I went through this exact same confusion when I started investing in MLPs. Here's what I learned after making some mistakes my first year: When you reinvest MLP distributions, you're essentially doing two separate transactions: 1. **Receiving the distribution**: This reduces your cost basis by the ROC portion (say 25¢ out of your 30¢ distribution) 2. **Reinvesting**: You're buying new units at current market price with that 30¢ So your original shares have their cost basis reduced by 25¢, but you now own additional shares with a cost basis of 30¢ (whatever the market price was when you reinvested). The key is tracking each "lot" of shares separately. Your original purchase is one lot, each reinvestment creates a new lot. This becomes really important when you eventually sell, because you can choose which lots to sell first for tax optimization. I highly recommend setting up a spreadsheet or using portfolio tracking software that can handle multiple lots. Don't try to average everything together - the IRS wants you to track each purchase separately. Also, make sure to save every K-1 form you receive, as you'll need the historical data to calculate your adjusted basis when you sell. One more tip: consider whether you really want to reinvest automatically. Some people prefer to take the cash distributions and manually reinvest to have better control over timing and record-keeping.

This thread has been incredibly helpful! As someone who just became a partner in a small business this year, I was completely lost on these concepts. One thing I'm still confused about - my K-1 shows a negative capital account balance. How is that even possible? I contributed $25,000 initially and we've been profitable, but somehow my capital account is showing -$8,000. The partnership has some equipment loans, but I thought debt was supposed to help my basis, not hurt my capital account? Also, is there a difference between what shows up on the K-1 as my capital account and what I should be tracking for tax basis purposes? I feel like I'm missing something fundamental here.

This has been such an educational thread! I'm dealing with a similar K-1 situation and have been going in circles trying to understand these concepts. One thing that's really helping me is keeping separate worksheets for my capital account reconciliation versus my outside basis calculation. They're related but definitely not the same thing, as several people have pointed out. For anyone still struggling with the inside vs outside basis concept, I found it helpful to think of it this way: inside basis is what the partnership thinks its assets are worth for tax purposes, while outside basis is what YOUR interest in the partnership is worth for YOUR tax purposes. They can diverge because of timing differences in when income/losses are recognized, different depreciation methods, or various elections the partnership makes. The debt aspect that @Chloe Anderson and @Declan Ramirez mentioned is crucial - I didn't realize that even nonrecourse debt could increase my basis until I started tracking everything more carefully. It's definitely worth creating that quarterly tracking system rather than trying to reconstruct everything at year-end!